Overall investment into ASEAN is expected to rise amongst Singapore-based companies with Malaysia cited as becoming one of the largest beneficiaries according to an HSBC report. Malaysia’s growing consumer market and relative ease of doing business are driving these expansion plans. Based on the report, Malaysia is also a clear favourite destination for internationally oriented Singapore-based companies.
The HSBC-commissioned report by the Singapore Business Federation (SBF) sought the insights of 1,036 local Singapore-based companies on their interest in ASEAN expansion. 86% of those surveyed were considered Small or Medium Sized Enterprises (SMEs) defined as those with annual turnover of S$100million or less than 200 workers.
The growing consumer market and general ease of business and investment are key drivers for Malaysia’s inbound investment. Most of the Singapore-based SMEs who are entering Malaysia or expanding will have or are seeking an in-country relationship.
Andrew Sill, County Head of Commercial, HSBC Malaysia says, “Singapore-based SMEs can make a significant contribution to Malaysia’s economy as they look to expand beyond their domestic markets and can benefit from the cross-border activity that was previously seen as the domain of larger corporates. However, entering and expanding in any market is never a straight-line process and it is inevitable that there will be bumps along the way, particularly for SMEs who may not have the resources to fully navigate the differences in political and business cultural norms in neighboring countries.”